Neglecting transactions with suspected criminal customers
Exchange “We will upgrade the existing AML system”
[서울=뉴시스]Reporter Lee Ji-young = There is growing criticism that the system to prevent illegal transactions from major domestic currency exchanges is poor. They found that these exchanges took no action even though students in their 20s brought virtual assets worth 3.2 billion won from abroad 73 times and then exchanged them 91 times.
According to the industry on the 31st, the Financial Services Commission’s Financial Intelligence Unit (FIU) last year targeted five currency market operators that won (Upbit, Bithumb, Coinone, Corbit, and Gopax) for money laundering under the Specific Financial Information (Special Financial) Act. Proceedings Act) As a result of carrying out on-site inspections relating to the fulfillment of the prevention duty, such illegal and unfair cases were discovered.
Among the cases caught this time, it was confirmed that the most exposed type of abnormal transaction. An exchange did not report to the FIU even though customer A, a wage earner, acquired 27.8 billion worth of virtual assets from abroad 1074 times over 9 months and sold them 12,267 times. At this time, although it showed an abnormal transaction pattern where 28.2 billion cash was fully withdrawn over 712 times, it was not identified as a suspicious transaction.
Next, a number of suspicious transactions were detected. The exchange has no doubts even if a 95-year-old person trades more than 30 types of virtual assets using the early hours of the morning, or 31 seniors aged 73 to 85 all trade virtual assets using the one foreign IP address using automatic trading.
Transactions with suspected criminals were also neglected. The virtual assets transaction of customer B, which received a warrant from the investigative agency for multi-level wrongdoing, was not reviewed or reported to the FIU.
It was also revealed that no action was taken on invalid customer contact information. One exchange took no action although 555 customers could not be contacted using phone numbers starting with ‘011’ or ‘017’. In addition, 172 of the registered customer phone numbers were used by multiple customers, but were not confirmed.
It is also noted that the system for monitoring suspicious transactions is poor. Exchanges took an average of 80 days from the day a suspicious transaction was discovered to the decision to make a suspicious transaction. The longest review period was 225 days from the date the suspicious transaction was discovered.
The number of reports of suspicious transactions was also significantly low. One exchange reported only 1,118 of the 76,970 suspicious trades (alert) found for 2,391 high-value traders to the FIU. This means that only 1.45% of all suspicious transactions were reported. For the 75,852 cases that were not reported, it was reported that the simple reason was that ‘a review history exists for the same person’.
An employee transaction using a spouse’s account was also discovered. According to the Special Act, exchange executives and employees cannot trade virtual assets through the exchange. However, the FIU pointed out that executives and employees should also be wary of transactions that use other people’s accounts, such as spouses and lineal descendants, for their own calculations.
# Exchange “We will upgrade the existing anti-money laundering system”
Major domestic currency exchanges agreed to upgrade their existing anti-money laundering (AML) systems to prevent this from happening again.
“We detect and respond to abnormal transactions that may occur within the exchange through our own monitoring to detect abnormal transactions,” said Mr C, one of the officers of the large exchange. We are upgrading the anti-money laundering system by focusing on supplementing the standards and comprehensive inspection items.”
He then emphasized, “We intend to focus more on upgrading the current system so that the case that is caught this time will not happen again.”
Mr D, an officer of a large exchange, also said, “We are doing our best to build an AML compliance system at the level of financial institutions.” We will continue to strive to develop the AML system.”
On the other hand, there is also hope that the reporting system for suspicious exchange transactions will be strengthened with the discovery of this case. Mr E, a commercial bank official, said, “The bank reports the same types of cases caught this time to the FIU.”
He diagnosed, “Since we have just started receiving the test, in the future, if the reporting system is further strengthened in accordance with the guidelines required by the FIU, there will be a lack of trust in the virtual asset market is gradually being eased.”
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